Low-income homebuyers find few Gilbert options - East Valley Tribune: News

Low-income homebuyers find few Gilbert options

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Posted: Monday, February 8, 2010 4:09 pm | Updated: 3:32 am, Sat Oct 8, 2011.

Dana Ortiz was going to start shopping for her first house last week, eager to move out of her Mesa rental and stake her claim to the stability and status that she says paying a mortgage confers.

But at least one part of her dream will have to be deferred: living in Gilbert.

She was primed to start looking for a home in the townwhen, in mid-December, she was notified by e-mail that the federally funded agency she was getting assistance from, Community Housing Resources of Arizona, would no longer be doing business in Gilbert.

"I cried, because that really affected me," Ortiz said. "I worked so hard, and I thought I had everything in order."

Since then she's bounced back, qualifying for financial aid from another Maricopa County program targeting working-class and lower-income families. But the single mom won't be able to buy enough house in Gilbert for her three children. So she expects she'll be buying in Mesa and driving the kids, including a special-needs child, to Gilbert schools.

"We hope to live there (Gilbert) eventually, but it's going to be postponed for five years, because that's how long we have to stay in the house we're going to buy," she said.

Housing prices in Gilbert have fallen to the point where programs like the one Ortiz was enrolled in could help more families move into town. But at the same time, its government leaders are losing interest in taking on any role in helping to hand out the federal funds.

The Town Council's 6-1 vote late last year to end the CHRA program Ortiz was counting on also blocked two more affordable housing programs from expanding into Gilbert. A Save the Family affordable-rental program, which needed only letter of support from the council to apply for county funds, was reconsidered the following week and approved by a narrow 4-3 vote.

BAD TIMING

It was a surprise setback for Phoenix-based CHRA when the council voted not to renew its contract. The decision came just as executive director Joann Hauger was hoping to make more inroads in Gilbert this year, after recent precipitous home price declines.

The agency always had more difficulty finding affordable housing in Gilbert than its other cities, Phoenix and Glendale. Affordable housing is defined by the U.S. Department of Housing and Urban Development as consuming no more than 30 percent of a household's gross income.

Since 2002, the Gilbert first-time home buyer program, funded by federal money offered through CHRA, gave up to $30,000 of gap financing for families 20 to 30 percent below the Valley's average median income.

"We would talk to people who wanted to come to Gilbert but no amount of assistance would have made ownership in Gilbert a realistic option for them," Hauger said of the real-estate boom.

"Last year the prices had come down tremendously, but everybody was scared of getting into the market. You didn't find a lot of people who were interested in buying," she added, but the first-time homebuyer credit and other factors were drawing people like Ortiz.

Council members gave various reasons for not renewing the contract, from concerns about how much money the town might have to spend to administer the contracts to questions over what could happen if homebuyers defaulted on homeowners association fees.

ROOF OVER THEIR HEADS

Vice Mayor Linda Abbott's questions at the meeting focused on the HOA fees, but she said in a later interview she also does not feel the government should get involved in helping people buy homes they couldn't afford otherwise.

She said Gilbert has enough different kinds of housing to choose from, including rentals.

"I do believe people deserve to have a safe roof over their heads, but not necessarily a roof of their own ownership," Abbott said.

On the other side is Mayor John Lewis. He was the only person on the council who voted for all three contracts, arguinghaving a variety of affordable housing options helps attract employers to town.

He said affordable housing was a bigger problem years ago, when he led a diversity task force. "In 1999, we were not thought of in positive terms when it came to affordable housing. In 10 years, we've made great progress," he said.

In recent years the council frowned at bringing additional apartments and other multi-family housing to town, preferring to set whatever land aside possible for economic development.

Senior planner Linda Edwards said about 71 percent of Gilbert's land is planned for residences. Of that, 7 percent is set aside for multifamily housing, including apartments and condominiums that can also be built on top of retail or office suites.

FEW OPTIONS LEFT

With CHRA's exit, there are few affordable housing options left in Gilbert.

Mesa-based Save the Family was barely able to win the required letter of recommendation from the town to apply for $450,000 from the Maricopa HOME consortium. Once it did receive the OK, it sent paperwork requesting the funds, property development director Kyle Hamblin said.

If it succeeds, Save the Family plans to buy three residences in Gilbert and make them available to lower-income families with children under age 18. Hamblin said having residents from all income levels within the town's borders can lower costs for everyone who lives there.

"It can help with transportation taxes, the money that is spent (on roads and transit) because people have such long commutes. And without lower-income housing, you don't have a pool for low-cost labor," he said - which would include teachers, police officers and other working-class people.

The real-estate crash has lowered home prices in Gilbert considerably. According to Money magazine's 2006 Best Places to Live survey, which ranked Gilbert No. 18, the median home price was $284,900 and it had racked up 40 percent growth from 2004 to 2005.

The December 2009 resale home market report from Arizona State University's Center for Real Estate Theory and Practice reported Gilbert's median home price as $185,000, $30,000 below the previous month.

GOOD NEWS, BAD NEWS

Views on whether that trend will change any time soon vary. Jay Butler, ASU associate professor, said the market could be bumping along the bottom for a while.

He said the good or bad news, depending on whether you're a seller or buyer, is Gilbert's reputation is solid as a safe community with good schools in a good location.

"When homes are foreclosed on and sold back into the market, there isn't that much of a markdown," Butler said.

Nancy Niblett, an East Valley-based realtor who features a Web page touting the unusually affordable properties in Gilbert, said she is already seeing signs of an upturn.

Niblett said she is not seeing as many homes listed in the $120,000 to $150,000 range any more. "Most of those tend to go pretty quickly. We're starting to see an increase in pricing, which is good."

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